Three major Japanese container shipping lines say they plan to merge their shipping and overseas terminal operations as the industry struggles with overcapacity and mounting losses.
Container ship NYK Eagle - Image courtesy: Steve Greenwood
Mitsui O.S.K. Lines, Nippon Yusen K.K. and Kawasaki Kisen Kaisha, or K Line, said Monday they are forming a joint venture to unite their shipping operations. They also are merging terminal management businesses outside Japan.
The companies said in a statement they will have a combined fleet capacity of 1.4 million TEUs, putting them in sixth rank worldwide, with a 7 percent global market share.
Container shippers have been booking heavy losses as freight rates have sunk. The three Japanese shippers, which belong to the Hapag-Lloyd and Yang Ming Line alliance, expect to save 110 billion yen ($1.1 billion) in costs by merging.